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South Asia Investor Review is focused on reporting, analyzing and discussing the economy and the financial markets of countries in South Asia, including Pakistan, Bangladesh and Sri Lanka. For investors looking to invest in emerging markets beyond BRIC countries (Brazil, Russia, India and China), this blog is designed to help international investors looking to learn about investing in South Asia with focus on Pakistan. Riaz has another blog called Haq's Musings at http://www.riazhaq.com

Pakistan Power Regulator Publishes New Feed-in Tariffs for Solar

Pakistan’s National Electric Power Regulatory Authority (NEPRA) has published for public comments its revised feed-in tariffs (FiTs) for solar energy projects of up to 100 MW, according to a report in PV-Tech journal.

The proposed FiTs are slightly lower in Balochistan, Sindh and Southern Punjab region than in Khyber Pakhtun Khwa (KPK) and the rest of Punjab. The proposal for years 1 through 13 includes Rs. 11.128 (US$0.105) per unit for southern region and Rs. 11.783 (US$0.111) per unit for northern region. The rates drop to Rs. 5.588 (US$0.053) and Rs. 5.917 (US$0.056) per unit for northern and southern regions respectively for years 14-25. The average for the next 25 years works out to Rs. 9.924 (US$0.094) and Rs. 10.507 (US$0.099) per unit for the two regions.

Last year, NEPRA, the nation's power regulator, approved a regulatory framework for solar and wind energy for both commercial and residential installations. The framework includes feed-in tariffs for commercial power producers and net metering for residential applications of up to 1 MW.

Under the new Net Metering Law, NEPRA, the Pakistani power regulator, will grant power generation licenses to solar and wind system owners. The owners will need to register the critical equipment used, particularly the make and model of inverter and generator used. Among other technical considerations, the generator must also install a manual disconnect device to take the system off the network if necessary, according to details published by PV Tech publication.

Net metering is a billing mechanism that pays solar energy system owners for the electricity they add to the grid. It allows a residential customers with rooftop solar panels to generate more electricity than the home uses during daylight hours and sell it to the power supply company. It will require a bi-directional meter (or two separate meters) for implementation.

Pakistan has already introduced feed-in tariffs (FiTs) for larger renewable power systems to supply electricity to the national grid on a commercial scale. It paved the way for a 1000 MW Quaid-e-Azam solar park being built in Bahawalpur.

Cost of solar power is rapidly declining. However, Pakistan's NEPRA's attempt to cut tariff down from 14.15 cents to 9.25 cents per unit is being resisted strongly by Zonergy Company Limited, a Chinese company working on Quaid-e-Azam solar park power project, according to a story in Express Tribune newspaper. This is in sharp contrast to the record low solar tariff of Indian Rs 4.63 per unit (Pak Rs. 7.19) for 500 MW solar project by US-based Sun-Edison, according to Indian media reports.

Pakistan's renewable power policy and regulatory frameworks have drawn praise from international law firm Eversheds which has described the country as “one of the most exciting renewables markets globally, with an abundance of potential”. Alternative Energy Development Board (AEDB) of Pakistan's CEO, Amjad Ali Awan has said that "Pakistan’s renewable market is relatively new but it provides an attractive investment opportunity with compelling structures which make it bankable as well as marketable."

Net metering law is necessary but not sufficient to promote widespread use of renewable energy. It will take serious coordinated efforts of Pakistan power regulator NEPRA, the country's nascent solar industry and various utilities like K-Electric to start implementation. Meanwhile, consumers could install a stand-alone rooftop solar system that can be connected to the grid in future. They just need to make sure to select high-quality equipment, particularly inverter and switch, for this purpose which will most likely be acceptable to utilities.

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1.1 GW Of New #Solar Power Capacity Being Developed In #Pakistan with $3 billion in new #FDI http://cleantechnica.com/2016/06/01/1-1-gw-solar-capacity-developed-pakistan/ … via @CleanTechnica

Pakistan is expected to see a sharp jump in operational solar PV capacity over the next few years, as several project developers have signed pacts to set up projects.

The Alternative Energy Development Board (AEDB) has reported that as many as 35 solar PV power projects are currently at various stages of development. These projects will have a cumulative installed capacity of 1,111 MW.

The largest of these projects will come up at the Quaid-e-Azam solar power park. The project currently has 100 MW of operational capacity. Apollo Solar Pakistan, Crest Energy Pakistan, and Best Green Energy Pakistan are working on 100 MW of solar capacity each. These projects are expected to be commissioned by the end of this year. The total capacity of the Quaid-e-Azam solar park will thus increase to 400 MW against a planned capacity of 1,000 MW.

Six other developers have been issued letters of support for the development of projects with a cumulative capacity of 47.84 MW. The ADEB has also issued letters of intent for the development of 25 projects with a combined generation capacity of 663 MW. These projects are expected to be operational by 2018.

Additionally, the government of Punjab province has also issued letters of intent for projects with 600 MW of capacity, of which 300 MW of capacity has already secured financing.

Several European and Chinese companies have already invested in Pakistan’s renewable energy market. Foreign investors poured over $3 billion into the renewable energy sector in Pakistan over the last year.

Pakistan has updated its 2015 net metering scheme to make it more user friendly. The Government of Punjab, meanwhile, has unveiled a new Access to Clean Energy Investment Program, aimed at installing over 20,000 solar PV rooftop systems.

Pakistan has updated its net metering guidelines. Prime Minister Shahid Khaqan Abbasi officially launched the changes at a ceremony in Islamabad on January 3.

Overall, the framework is said to have been simplified, while net metering connections can now be gained in less than one month.

According to a statement on the Ministry of Information, Broadcasting & National Heritage Government of Pakistan website, Khaqan said issues of service and equipment quality had also been addressed.

He added that the key challenge now is to make the system “more efficient and reduce the cost of generation,” of which net metering is part of the plan.

Pakistan first introduced a net metering scheme on September 1, 2015. According to Net Metering Pakistan, as of last March 20, the Islamabad Electric Supply Company (IESCO) had connected 56 net metering systems and imported nearly 6 MWh of electricity.

Reducing the burden

The Government of Punjab is also looking to up the solar ante, having introduced The Access to Clean Energy Investment Program, aimed at reducing burden on the National Grid and improving environmental conditions through the implementation of off-grid, decentralized energy solutions.

It is looking to install solar PV rooftop systems on all basic health units (2,400), schools (20,000) and public buildings in the province.

In a document calling for expressions of interest (EOI), the government adds, “The program also includes conducting the energy efficiency audits on the public sector building, construction of a model net zero building and establishment of IT based Program Performance Monitoring System.”

Among the conditions required for project developers, are the criteria that they have completed at least two similar projects within the last 10 years, and have an annual turnover of Rs. 30.00 Million (around US$270,800) or higher.

To fund the program, the government has asked the Asian Development Bank for support to the tune of $87.69 million, which was already approved in November 2016.

“The ADB will support broader GoPb provincial government program for providing uninterrupted access to affordable and clean energy, as set out in the respective power sector master plan,” said the government.

Overall, two phases have been envisaged for implementing the plan: (i) solar PV rooftop systems on 10,861 schools in South Punjab; and (ii) systems on another around 9,700 schools in Northern and Central Punjab.

“The installed solar plants will provide electricity to more than 2.4 million students, including 30% girl’s schools,” said the government.

In addition, a 2.5 MW PV system will be installed at the Islamia University Bahawalpur in Punjab by Punjab Energy Efficiency and Conservation Agency (PEECA). And 2,400 basic healthcare units will receive solar PV rooftop installations.

According to Bloomberg New Energy Finance (BNEF), Pakistan will see PV installations increase 46% in 2017, up from 700 MW in 2016, to 1.020 GW.

Nizam Bijli installs pay-as-you-go solar systems in homes and businesses, where customers pay 2,000 Pakistani rupees ($18) a month over 16 months for three bulbs, one fan and two USB slots to charge their mobile phones.

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“Now I can eat fish and not worry about bones getting stuck in my throat,” Mohammad told the Thomson Reuters Foundation, describing how he enjoys a well-lit evening meal since his son, Ghulam Nabi, installed solar bulbs in his home three months ago.

For nearly a decade, chronic power shortages have hobbled Pakistan’s economy, leaving 144 million people without electricity or enduring lengthy blackouts, the World Bank says.

Globally, more than one billion people, or one in seven, lacked access to electricity in 2014 and many more suffer from poor supply, which keeps them trapped in poverty, reliant on wood, candles and kerosene, experts say.

These numbers may be grim but young entrepreneurs like Saad Ahmad see this as huge growth potential in Pakistan, which generates only two-thirds of its energy needs.

“There is massive opportunity for business,” said Ahmad, 26, chief executive of solar energy supplier Nizam Bijli, which has powered 1,300 homes since it started in 2016 and hopes to reach 1 million people by 2020.

“There is room for many companies to make a difference in the lives of these communities.”

“Now I can eat fish and not worry about bones getting stuck in my throat,” Mohammad told the Thomson Reuters Foundation, describing how he enjoys a well-lit evening meal since his son, Ghulam Nabi, installed solar bulbs in his home three months ago.

----“There is massive opportunity for business,” said Ahmad, 26, chief executive of solar energy supplier Nizam Bijli, which has powered 1,300 homes since it started in 2016 and hopes to reach 1 million people by 2020.

“There is room for many companies to make a difference in the lives of these communities.”

A similar ‘off-grid revolution’ is afoot across Africa due to fast-dropping costs and plenty of sun.

Currently only four percent of Pakistani households tap into solar power due to lack of awareness, limited supply chains and a shortage of consumer financing for relatively high up-front costs, according to the World Bank.

Nizam Bijli installs pay-as-you-go solar systems in homes and businesses, where customers pay 2,000 Pakistani rupees ($18) a month over 16 months for three bulbs, one fan and two USB slots to charge their mobile phones.

Ahmad believes this is affordable as families spend a similar amount on kerosene and charging mobile phones in nearby towns. The average income in Pakistan is about $1,450, according to World Bank data.

Ahmad is certain the only way out of Pakistan’s energy crisis is to bypass the grid and leapfrog straight into low-carbon sources like wind and solar.

Pakistan already has one major solar park in the eastern province of Punjab, built with Chinese investment. Meanwhile, the parliament in Islamabad switched to solar energy in 2016 and sells excess energy it produces back to the grid.

TEA AND CIGARETTESAllah Dino’s barber shop in Khorwah, 180 km (110 miles) east of Pakistan’s largest city, Karachi, is connected to the grid.

But intermittent power had forced him to close by sunset. Now he has solar, his business is open until close to midnight.

“There is never an idle moment and my men now work in shifts,” Dino said.

Next door in Bhittai roadside restaurant, solar has also been good for Mohammad Azeem. It allows truckers to stop by throughout the night to drink his tea, brewed on wooden stoves.

Solar Guide Pakistan: We have been searching online for information regarding Solar setup in Pakistan but we often end up with a lot of questions about how to calculate the load and how many solar panels are required. Single Solar Panel in Pakistan costs around 12,000 – 14,000 which gives a rated output of 250 watts at peak time. However, the prices of solar inverters vary from 11,000 – 120,000 depending on the brand and capacity.

This Article will Cover the following Topics:

Solar Panel Price in PakistanSolar Inverter Price in PakistanHow to install a solar panelHow to connect Solar Panel to Charge RegulatorHow to calculate your house load and decide how many solar Panels are RequiredComplete setup of Solar Panel System for home

Simply plug it into the socket and save: Small photovoltaic systems for less than 60000 PKR should tap into the sun, without having to deal with craftsmen, authorities and energy suppliers. We tried it.

Since solar modules are cheap, the computational production costs for solar electricity are well below the average electricity price paid by private households in Germany. Even without feed-in tariff, therefore, one’s own solar power generation can count, namely by the self-consumption of self-generated solar power. Ultimately, you save costs by buying less electricity from the energy supplier. A mini-system should not only be much cheaper than a “real” solar system on the roof but also save time and annoyance: about assembly, registration with network operators and Federal Network Agency for feed-in compensation and for the replacement of the electricity meter.

For less than 4000 you get “regenerated” electricity meter with Ferraris technology, so the classic wheel.Companies such as Go Green Solutions, Infinitum Energy, Minijoule and Sun Invention offer kits that essentially consist of the actual photovoltaic (PV) module and a suitable inverter. Depending on the offer, there are also fastening materials and connecting cables. The assembly of the parts, the assembly at the intended location and the electrical connection should take over the buyer or hire a craftsman with it. But here is already the first rabbit in the pepper: Already comparatively small additional costs jeopardize the economy, so the sense of investment. After all, saving only starts when the PV system has generated its acquisition, installation and possibly repair costs. That lasts even in the best case several years. In addition, acquaintance with the amateur connection to the power grid can cause serious technical problems and risks being taken to account for violation of norms and laws. However, a photovoltaic system can hardly be hidden: after all, solar cells must stand in the blazing sun if they are ever to pay for themselves.

The collaboration agreement was signed by Babbar Wajid, Head of Product Development & Business Management – JS Bank and Usman Ahmad, CEO – Nizam Energy in the presence of team members from both organizations. Credit: JS Bank

Pakistani financier JS Bank has partnered with local solar firm Nizam Energy on a PV module financing solution directed at small and medium enterprises (SMEs).

The smart panel solution, named JS Smart Roshni, will allow SMEs that use Nizam’s solar modules and technical services to benefit from financing of up to PKR10 million (~US$86,500) at a mark-up of 6% from the bank, while reducing the SMEs’ dependency on grid power.

Babbar Wajid, head of product development and business management, JS Bank said: “Our partnership with Nizam Energy reflects our commitment to provide customers with responsible solutions for their energy needs, while creating medium to long-term savings. This initiative will help our clients increase operational efficiency in an environmentally responsible manner, and help reduce load on the national grid.”

In other news, the Government of Sindh Province in Pakistan recently rejected submissions from all four bidders in its tender for 352 solar PV systems to electrify primary health facilities. Meanwhile, in February, the Pakistani regulator issued its tariff determinations for 300MW of solar with tariffs significantly below grid parity, for which Nizam was a co-sponser with Scatec Solar for 150MW worth of projects.

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I am the Founder and President of PakAlumni Worldwide, a global social network for Pakistanis, South Asians and their friends. I also served as Chairman of the NEDians Convention 2007. In addition to being a South Asia watcher, an investor, business consultant and avid follower of the world financial markets, I have more than 25 years experience in the hi-tech industry. I have been on the faculties of Rutgers University and NED Engineering University and cofounded two high-tech startups, Cautella, Inc. and DynArray Corp and managed multi-million dollar P&Ls. I am a pioneer of the PC and mobile businesses and I have held senior management positions in hardware and software development of Intel’s microprocessor product line from 8086 to Pentium processors. My experience includes senior roles in marketing, engineering and business management. I was recognized as “Person of the Year” by PC Magazine for my contribution to 80386 program. I have an MS degree in Electrical engineering from the New Jersey Institute of Technology.
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